Background
Eugene Sacco was charged with a series of financial crimes against American Legion Post 13 in Pasadena. Over several years, he opened multiple bank accounts using fabricated corporate identities that mimicked Post 13’s name, forged corporate documents to present himself to Wells Fargo as a director of Post 13, used Post 13’s federal tax identification number without authorization, and diverted over $100,000 in unauthorized wire transfers from Post 13’s Morgan Stanley account into accounts he controlled. In the crime for which he ultimately pleaded no contest — grand theft — Sacco intercepted a charitable bequest intended for Post 13, contacted the donor’s trust posing as an authorized representative, persuaded the trust to reissue the $11,534 check to a fictitious entity he controlled, and deposited it into his own account while signing trust documents representing Post 13 as the beneficiary.
Before trial, Sacco moved for pretrial mental health diversion under Penal Code § 1001.36 — a California statute that allows courts to divert qualifying defendants to mental health treatment in lieu of prosecution. He submitted a psychologist’s report diagnosing him with “Persistent Depressive Disorder with Anxious Distress, Moderate-Severe,” characterized by poor concentration, forgetfulness, sleep disturbances, and difficulty functioning. The expert opined the disorder was a significant factor in the offenses. The trial court denied the motion, finding the charged conduct’s complexity rebutted the statutory presumption. Sacco pleaded no contest to grand theft and appealed.
The Court’s Holding
The Second Appellate District affirmed. Under Penal Code § 1001.36, a qualifying mental health diagnosis creates a rebuttable presumption that the disorder was a “significant factor” in the offense. The prosecution can overcome that presumption by clear and convincing evidence that the disorder was not a contributing factor. The trial court found the presumption rebutted — not by separate prosecution evidence, but by the facts of the crimes themselves.
The appellate court held this was proper. Sacco’s claimed symptoms — forgetfulness, inability to concentrate, cognitive impairment severe enough to prevent him from completing a round of golf — were flatly inconsistent with what the charges required: years of coordinated planning across multiple financial institutions, the creation of fraudulent corporate identity documents, the interception and rerouting of a charitable bequest through multiple steps, and the sustained management of parallel fictitious entities. A trial court may reject expert testimony that ignores this kind of fundamental factual contradiction, and the court here expressly relied on the facts of the case — not merely the expert’s analytical gaps — to find the presumption overcome. The ruling also clarified that People v. Harlow (2025), which describes the prosecution’s burden, does not limit the types of evidence a court may consider in evaluating the presumption.
Key Takeaways
- The Penal Code § 1001.36 rebuttable presumption can be overcome by the facts of the charged crime itself, not only by independent prosecution rebuttal evidence — where the crime’s sophistication flatly contradicts the claimed cognitive limitations.
- Multi-year, coordinated financial schemes requiring planning, document forgery, and sustained impersonation are powerful circumstantial evidence against a disorder characterized by forgetfulness and poor concentration.
- Trial courts may reject expert diversion opinions that fail to account for the defendant’s specific criminal conduct; the appellate court defers to the trial court’s credibility assessment on this point.
- Defense counsel seeking mental health diversion should ensure the expert’s report directly engages the facts of the offense and explains why the claimed mental disorder is consistent with — not undermined by — the sophistication of the alleged conduct.
- The ruling does not narrow People v. Harlow‘s clear-and-convincing-evidence standard; it clarifies that the evidence can come from the crimes’ own circumstances, not just from prosecution-submitted expert testimony or records.
Why It Matters
Penal Code § 1001.36, enacted in 2018 and significantly expanded in subsequent years, reflects California’s policy of diverting mentally ill defendants toward treatment rather than incarceration. Courts have increasingly grappled with how to apply the statute’s rebuttable-presumption framework in the face of sophisticated criminal conduct. This decision provides a clear answer: the statute’s beneficent purpose does not require courts to grant diversion when the facts of the crime affirmatively contradict the claimed impairments. A diagnosis alone — even from a qualified expert — is not enough if the alleged criminal conduct demonstrates exactly the capabilities the defendant claims he lacks.
For California criminal defense attorneys, the takeaway is practical: expert evaluations for § 1001.36 diversion motions must grapple directly with the prosecution’s evidence of how the crime was committed. A report that treats the offense as an abstraction, rather than explaining how a defendant with severe concentration deficits could execute a multi-year financial fraud, is unlikely to carry the day. For prosecutors, the decision confirms that the crime’s own complexity and duration can be the primary vehicle for rebutting the diversion presumption — without the need for a competing expert.